MM – 5008

MARKETING MANAGEMENT

KUKU BIMA ENER-G

R 42 B

Past Present Future Syndicate

Itca Istia Wahyuni 29109319

Heber Manurung 29109322

Lea Kusumawati 29109342

La Ode Muhamad Arief Akbar 29109367

Muhammad Rumeizy 29109379

Pitra Adhi Pamungkas 29109380

MASTER OF BUSINESS ADMINISTRATION

BANDUNG INSTITUTE OF TECHNOLOGY

BANDUNG

2010

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BACKGROUND

Health is the main capital for life. Indonesian society lifestyle that now tends to

'modern' human demands must always be fit all the time. In some communities,

food or sports drinks have become an absolute necessity, particularly to restore

stamina after doing heavy work or adding power if you want to do a particular

activity. Therefore, the health drink in this case energy drinks can be a

complementary to maintain health and stamina of the human body.

Over time, the health beverage industry showed a fairly rapid growth along with

rising levels of prosperity and the level of public awareness of the health body.

Demand for supplements beverage products continue to rise. Extra Joss,

Kratingdaeng, Hemaviton, Vit Up is among the famous brands in the industry

drink sports drinks or supplements. Competition in this business is also quite

frequent. However, business opportunities in the sector remains lucrative

supplement drinks. This is because the velocity of money in this business is

classified as very large 2 - 2,5 billion USD per year.

In April 23, 2004 coincided with their CEO birthday, they launched Kuku Bima

Ener-G. Based on Irwan Hidayat (CEO of PT. Sido Muncul), this product

launched because the position of PT. Sido Muncul as a herb manufacturer was

oppressed by many pharmaceutical industry. The entry of PT. Sido Muncul to this

business category of energy drink was not without consideration. They have three

main purposes to gain the market. First, strong Brand (Kuku Bima), Kuku Bima

still compatible with this energy drink business. Second, a good distribution

channel. PT. Sido Muncul at least have 150,000 distribution channels in the form

of “jamu” merchant that spread all over Indonesia. Third, they have a contingency

plan that they never use before. When Sido Muncul Launched Kuku Bima Energ-

G as an energy drink, They broke the myth that all the energy drinks have to be

yellow colored with the same sour flavour. Kuku Bima launched in many varian

of flavour and colour, with no big different on its ingredient.

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PRODUCT INFORMATION

According to PT. Sido Muncul, Kuku Bima Ener-G is an energy drink product.

Energy drinks are soft drinks advertised as providing energy to improve physical

activity of the drinker, as compared to a typical drink. Rather than providing food

energy, Kuku Bima Ener-G drinks are designed to increase a user's mental

alertness and physical performance by the addition of caffeine, vitamins, and

herbal supplements which may interact to provide a stimulant effect over and

above that obtained from caffeine alone. There are several kinds of energy drink

according to their packaging which are bottled, canned, effervescent, and in

sachet.

Kuku Bima Ener-G is a product of sports drinks (energy drinks) which is

produced by PT Sido Muncul. This product is a new variant developed from Kuku

Bima herbal medicine.

BUSINESS AND INDUSTRY SITUATION

According to Irwan Hidayat, (President Director of PT Sido Muncul), now there

are 12 brand energy drinks, but who can survive no less than 8-9 brands. Despite

advertising a lot, but if not coupled with a quality product, which has been known

brand and the price is reasonable, will not be able to survive in the market.

Price penetration by PT Sido Muncul, comes with set prices 20 percent cheaper

than other similar products launching this product during the first time, makes

Kuku Bima Ener-G became three positions directly below the Extra Joss and

Hemaviton Jreng. Every month, more than 8 million sachets of Kuku Bima Ener-

G has absorbed by the market. Such a rapid development of the Kuku Bima Ener-

G can even reduce product market share was the market leader that is Extra Joss.

It was later spurred PT Bintang Toedjoe for wider Extra Joss marketing to foreign

countries and more innovation in the sense of product variants.

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COMPETITION SITUATION

Indonesian energy drink market was first targeted by international brand energy

drink product such as Kratingdaeng (Red Bull), Lipovitan, and M 150. Those

products provide a premium class of energy drink with nice packaging (glass

bottle) and quite high price (about IDR 4,000 per bottle). In 1994, Indonesian herb

company, PT. Bintang Toedjoe, launched a generic energy drink product named

Extra Joss targeting lower economic class (workers) of energy drink market users.

Packed by sachet, this energy drink has lower price (about IDR 900 per sachet). In

those years, Extra Joss was the only market share holder with no competitors.

In 2004, PT. Sido Muncul, Indonesian biggest herb company, launched Kuku

Bima Ener-G. Its product has change the energy drink paradigm which has yellow

colour and sour taste by its various flavours. With a good branding and marketing

strategy, in short period, Kuku Bima Ener-G become the market challenger of the

market leader, Extra Joss.

34%

30%

18%

8%10%

Market Share

Extra JossKuku Bima Ener GHemaviton JrengKratingdaengOthers

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FACTOR COMPARISON

Kuku Bima Ener-G Extra Joss Hemaviton Jreng M-150 Kratingdaeng

Product

ManufacturerPT. Sido Muncul

(Launched in 2004)PT. Bintang Toedjoe(Launched in 1994)

PT. Tempo Scan Pacific

(Launched in 2001)

PT. M-150 Indonesia(Launched in 2002)

PT Asiasejahtera Perdana Pharmaceutical

(Launched in 1993)

Variant

Original Pontianak Orange Bali Red Grape Kopi Red Guava Tea

Active Original Burst Grape Apple Black Currant Soda Cream Ginger Joss Fit Honey-Tea Joss Fit

Original Mango Lemon Red Grape

Original Soda Gembira M + Milk

Original

Tagline Roso! (Kuat!)Joss untuk Extra…Joss untuk Sehat!

Jreng SegarnyaJreng Staminanya

Bisa!Memulihkan stamina

yang loyo

Price IDR 900 / Sachet IDR 900 / Sachet IDR 900 / Sachet IDR 1,000 / Sachet IDR 4,000 / Bottle

Place (Distribution)

Sido Muncul Herb Network (more than 150,000 outlet)

Traditional Market Modern Market

Warung Joss Traditional Market Modern Market

Traditional Market Modern Market

Traditional Market Modern Market

Group Agent Traditional Market Modern Market

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MARKETING MIX

Product Management

Kuku Bima Ener-G is trademarks of the production of energy drinks PT Sido

Muncul. This energy drinks products launched in 2004. In the launch, Kuku Bima

Ener-G breaks the myth that energy drinks are always yellow, with a similar taste.

Various variants of Kuku Bima Ener-G consist of various flavors and colors, with

content that is not far from similar products, which is caffeine. Until now Kuku

Bima Energi has 6 variant flavors: original, grapes, oranges, coffee, guava, and

tea. The latter two newly launched in 2007. Kuku Bima Ener-G energy drinks in

150 ml bottles.

Good for both men and women drink

Have more content of ginseng and royal jelly than similar products

Complete Vitamins, plus vitamin B12 which is used to add blood

Without Saccharine

Price

When first launched, Kuku Bima Ener-G has a price 20% cheaper if compares to

similar products. In the market, a product box Kuku Bima Ener-G contains 6

sachets priced Rp 4.000,00. For the latest product in the form of 150 ml bottles,

Kuku Bima has a price Rp 2.250,00.

Place

Kuku Bima Ener-G expands the scope of its distribution to stores that are not just

selling herbs, such as shops, cigarette shops, to modern outlets. No less than

150,000 merchants’ herbs (either permanent or mobile) also contribute to the

distribution of this product.

Promotion

Kuku Bima Ener-G promotion program is for dealers which provide the

opportunity to choose a gift of pure gold or electronic goods for the traders who

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want to take up to 3 cartons of 160 cartons of Kuku Bima Ener-G. Instead, Kuku

Bima Ener-G communications campaigns are always wrapped in CSR (Corporate

Social Responsibility). Starting from Mbah Marijan, Chris John, the TKI (Tenaga

Kerja Indonesia) who has been tortured by the employers in Malaysia, to Laskar

Mandiri (singers, pengojek, shoeshine, herbal traders wear, scavengers, and

peddlers), coupled to the ad model Kuku Bima Ener-G. For other brand activity,

Kuku Bima often was sponsoring programs that target the male market women

over 24 years, with socioeconomic status C, D, and E. For example, boxing sports

programs and competitions to sing dangdut "Stardut" which appear in the TPI.

MARKETING STRATEGY

Segmentation

People who need energy drinks

Targeting

Energy drinks for men and women

Age 17-40 years old

Economic status of D and E (lower middle income)

Positioning

As an energy drink that also promote health because it contains ginseng and

honey and have a sense of the variety of them original, grapes, oranges, coffee,

tea, and guava.

To enter the energy drink industry as the “new entry” product effectively, PT.Sido

Muncul carry out a comprehensive and continuous marketing strategy to push

Kuku Bima Ener-G in gaining the industry market share. The marketing strategy

of Kuku Bima is explained in the followings:

1. Using Brand Endorser – with years of experience in Indonesian consumer

behavior, PT. Sido Muncul knows well that contract infamous public figure as

Brand Ambassador will effectively increase brand awareness nationally. PT.

Sido Muncul contract Mbah Maridjan, a “kunchen” of Mount Merapi

(supposedly a very wise public figure who owns supernatural power) that

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become very famous in 2004 because of the “almost” eruption of Mount

Merapi to address the very superstitious Indonesian market and also Chris

John, the most well-known Indonesian boxer who hold the title of WBA Super

World Featherweight since 2003 to attract the working class market.

2. Create a community such as “laskar mandiri” - a community that huddle up

street musician, begger, “anak jalanan” (homeless children) made by Kuku

Bima Ener-G to increase brand awareness and carrying grass rooting strategy.

3. Using Corporate Social Responsibility – by organizing event such as “mudik

bersama” (Indonesian yearly cultural event that happen after the Ramadhan

month), give free gimmicks to Kuku Bima Ener-G agents and using “laskar

mandiri” (community made by Kuku Bima) in their above the line marketing to

create brand awareness

4. Using the above the line and below the line promotion – their above the line

marketing includes TV Commercials Break, Newspaper, and Magazine

advertisements. While their below the line marketing campaign includes

sponsorship in sports events for examples Chris John boxing match.

5. Using unique distribution channel – Besides distributing its product to usual

distribution channel such as supermarket, mini market like all its competitions,

Kuku Bima differentiate itself by going deeper to the traditional distribution

channel such as “jamu merchants”, “warung” (Indonesian traditional stall)

which are “grass-rooted” to the working class market.

SWOT ANALYSIS

Strength

Kuku Bima Ener-G bearing the title of Top Brand 2008

Good distribution channel

Many variant of flavor

Not only rely on caffeine but also added vitamins & herbs

Successful market research

Has a strong positioning with Chris John, Ade Ray, Mbah Maridjan for an

Ambassador

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Weakness

Difficult to determine the amount of production based on market demand

Opportunities

The number of people who need extra energy to do activities (broad market)

Threat

New entry that can take over market share

Fear of consumers, especially the women in the consumed

Variant sense of Kuku Bima can be replicated

Energy drinks market in the country has entered the mature stage

Competitive with other beverage products such as sports drinks, isotonic,

Carbonated soft drinks that offer convenience, easy consume, and available

anywhere.

MAIN ISSUE

Kuku Bima as a new entry to win the competition with Extra Joss and take over

market share by using a simple value added of using different variants of taste and

appropriate marketing strategies.

SOLUTION AND CONTINGENCY PLAN

PT Sido Muncul should developing better market research to forecasting how

much market demand in Indonesia.

Kuku Bima Ener-G must provide continuous innovation in order to be a energy

drink market leader in Indonesia and entry a new market share, such as:

1. Kuku Bima Ener-G isotonic which providing sports and energy drinks to

add ions and body fluids.

2. Kuku Bima Ener-G low caffeine

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CONCLUSION

Kuku Bima Ener-G strategies seem successful to optimize its marketing mix to

meet customer satisfaction. Product innovations has implemented with the

adjusted price of the customer's ability. Customers also had given easy access to

products and to remember the product brand, especially with the slogan "Roso-

Roso," which is associated with Mbah Maridjan. Behind all the successes that

have been achieved, Kuku Bima Ener-G should always consider all competitors.

In the future, awareness and distribution aspects will become more competitive

because of quality factors that should be a major differentiation will be more

difficult to distinguish. This is because each sports drink will continue to innovate,

even imitate each other. This is what underlies the importance of marketing

communications.

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